- Briefing Room
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Ladies and gentlemen, and keeper standing by. Welcome to the value capture special assessment techniques and case studies conference call. At this time all participants are in listen only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. If you should require assistance during the call please press star zero. I would now like to turn the conference over to your host. Please go ahead.
On behalf of the Federal Highway administration I would like to welcome everyone to today's webinar. Value capture special assessment techniques and case studies. My name is Cara and I'm with the U.S. D.O.T. center in Cambridge, Massachusetts. I will be moderating today's webinar as well as facilitating question and answers and helping to address any technical problems. On the top left side of your screen you will find the audio call in information. Below that is the chat box you can use to submit questions to our presenters throughout the webinar. You can also ask questions by pressing star when on your phone. You will receive more instructions about that later. If you have any technical difficulties, please use the chat box to send a private message to me. Our webinar will run until 2:30 Eastern time and has three speakers. I will give you one more moment to fill out the intro questions that are on the screen right now and then I will turn it over to the agenda.
Thank you for answering the questions. Today we will be hearing from Thay bishop the senior program advisor at the Federal Highway administration followed by Noel Dominguez coordination section chief at the Fairfax County Department of Transportation and then Natalie Avery, executive director of the DC Council. Up on the screen are the future value capture webinars in the series. After today's webinar we have four more over the next few months. You can click on these links on the screen to register for the webinars. We will bring up questions at the end of each section and we will also anticipate having a few minutes at the end of the webinar for additional questions and answers. The presenter slides will be available for download at the end of the webinar. With that I would like to turn it over to Thay bishop from the FHWA center for innovative finance and support will begin the discussion.
Good afternoon and good morning to everyone. Welcome to the value capture webinar series. I am Thay bishop the senior program advisor at the Federal Highway administration and in the office of innovative program delivery. The federal highway administration is currently implementing the fifth round of everyday initiatives. The value capture is one of the 10 innovations included in the EDC five. The EDC five value capture innovation promotes the value capture mechanism as part of the funding and innovative finance strategies to accelerate project delivery and provide reliable and sustainable transportation gap funding. We have grouped the value capture techniques into seven broad categories. Today we cover the second category. The special assessment district, sales tax district, and community improving district or business improvement district.
The webinar today provides an overview of the technique, focusing on several special assessment models successfully used by the states and locals. Due to time constraints I will only focus on the important information and save time for the speakers. We will also hear from the executive director of the improving district counsel. The presentation materials are very comprehensive and available for you to download at the end of the webinar. There are several key distinctions that I wanted to go over with you. The first one is the funding and financing. The special assessment is revenue or funding sources. Funding or revenue repaid financing. Financing can be pay as you go or borrowing. Financing cannot create revenue but the innovative finance can lower the borrowing cost meaning more money can go to construction and lower project costs. Project delivery is either you do it yourself or shifting the responsibilities, expertise, or risks to contactor. It can be a wide range of project delivery techniques. The next key distinction is special assessment versus taxes. Is a special assessment a tax? The answer is no. A special assessment is a levy upon property within a specified district. Although it resembles a tax, a special assessment is not a tax. I quote from the court case Knott versus City of Flint. Here is the difference. The value capture or special assessment is only beneficiaries paid. Taxes is the primary purpose generate revenue. It forced contribution to generate revenue for the maintenance of government services that are offered to the general public. Levied Whether or not one uses a particular service. Everybody pays whether you benefit from the project or not. Authority to levy tax governed and restricted by the state law. It must be authorized by the legislature. The assessment is not a revenue generation mechanism but the mean to compensate the public sector for the cost of the special services or transportation improvements. Assessment must benefit the property owners and authorization for the special assessments come from the power of the local government. Local governments may develop the assessments and the manner of apportioning cost.
Here is the reasons that the state and local public agencies should consider the special assessment as supplement revenue sources for transportation improvements.
The Federal funding for transportation has eroded and traditional revenue sources have failed to keep pace with the nation transportation infrastructure needs. two out of the every five miles of American urban interstate is congested. It is a commuter nightmare and the cost the country is about $160 billion in wasted time and fuel. Our public roads and bridges are in poor condition because they are chronically underfunded and deferred maintenance. It now becomes very difficult to address due to the conditions and aging. Lack of funding can impact safety.
Approximately 47,000 bridges in this country are rated in poor condition. The average is really misleading. You can see 47000 bridges in this country are in poor condition and over 43% or 260,000 bridges are over 50 years old. According to the engineer most of the nation's bridges useful life is about 50 years. They are reaching the end of its useful life. Significant funding is needed for major rehabilitation and replacement. A current estimated backlog of bridge rehabilitation price tag is 123 billion. About 50% of these bridges are owned by the local government. The vast majority is in need poor condition and in desperate need of repair. In some cases, poor conditions are visible and readily apparent. Those bridges tend to be small and relatively light traveled but are the means by which raw commodities are moved from the point of production to the markets and mobility for the school buses, emergency response, and moving farming equipment. Remember that farming equipment today is much different than 30 or 50 years ago.
The condition of the nation's highway pavement is even worse. It is in poor condition. This slide shows the breakdown of the nation's highway miles in urban and rural areas as well as the federal aid highway system and nonfederal aid highway system. You can see only 1 million miles are eligible for Federal-aid highway fund. Keep in mind that Federal-aid only fund for Capital and not Operating and Maintenance. Approximately 3.2 million miles are not eligible for federal aid highway fund. Roughly 1 and a half-million miles are in urban areas. It is heavy traffic so the level deterioration is probably worse than D+. Just for your information. Local owned about roughly 77% of the public roads. Federal owned less than 3%.
Let look at the major funding sources for the Federal aid highway system. It is insolvent. To keep the highway trust fund solvent, Congress has to transfer the money from general fund into the Highway trust fund. There is a gap widening between the level of funding and the spending needed. According to the congressional budget office projections in January 2019, a future five year reauthorization bill would need to cover a projected $68 billion shortfall, and a six-year bill would need to cover $89 billion shortfall. This is really troublesome because Federal fund only address 1 million miles of the public roads, the remaining of 3.2 million miles of the nation public roads needed improvements will have to come from alternative revenue sources
Value capture is untapped revenue sources available for the state and local public agencies. The special assessment district can be utilized to supplement the state and local funding needed to improve the roads and bridges condition.
Special assessment is a fee imposed on property owners within the defined district by the local government to help pay for public infrastructure improvement. Can be self-impose by property owners as well. It has a defined geographic area determined to benefit from the infrastructure improving. And authorizes in 50 states and District of Columbia and implemented by the local government. It must have a majority support from the properties being assessed to be effective. Assessment must be in proportion to the special benefits received from the improvements. The underlying principle is that an assessment should be less than or equal to the benefit conferred on the property from nearby improvements. A special assessment is not a unit of government. It operates by a separate political subdivision managing by the Board of Directors. It normally collected as part of the annual property tax and distributed back to the special assessment district for authorized use. It funds capital cost but could be more flexible if needed for operating and maintenance.
The special assessment generates a sustainable and reliable revenue stream to supplement traditional funding. It provides funding for transportation needs in urban and suburban as well as rural projects. It eliminates the burden of an increase in property taxes to the entire community. In value capture only beneficiaries repay. It supports the economic development, jobs creation and retention as well as attract the private investment. It provides access to the Federal innovative finance program. It can also the source of the local matching share for the state and federal grants. It creates funding mechanism to operate or maintain public facilities.
There are two types of special assessments. The special assessment district is initiated either by the city Council or county commission or by the property owner request for formation petition for specific assessment duration.
the first type is the government district including the transportation approving district or transportation development district. It is typical initiated by the local government. The second type is the community improvement District or business improving district. Those are the voluntary imposed assessment by the commercial property owner to fund for the improvement and services within the district. Both would require to have a majority support by the property owner within the district as well as have a specific duration for the special assessment.
Transportation improving district can have quite a few names. The purposes may be varied but the creation of the district and the requirements are similar. The government district targets a very specific projects and services. Often used in conjunction with tax incremental finance. We will have tax incremental finance webinar on August 22. Registration is open you have not registered please do so. The transportation improvement District is a government district. Government district sometimes self assessed, often government created. Formed as a separate political subdivision with a board of directors. The local government body typically county commission or city council act as the lead entity in forming the district.
Created for the purpose of coordinating and funding transportation infrastructure improvement programs or projects. Particularly road construction projects, among the local government in the specific area. Can levy special assessments and or collect sales tax on the retail sales within the district for a fixed amount of time. The notice and public hearing is required if the sales tax levy is involved. Must be consented by a majority of the property owners to be effective. And must be uniformly applied to the same class of property and subject to the voter referendum.
The special assessment revenue provides the opportunity to access federal innovative finance programs. Those are the loan programs. The special assessment revenue can serve as a matching share for Federal and state grant. It can be a source of repayment for the federal low interest-rate loan program that I mentioned earlier such as TIFIA, RRIF, TIFIA capitalize in state infrastructure bank account loan to rural and local projects. It is a very low interest rate. Half of treasury rate like 1.3 something %. It also attract the private capital or you can go directly to the capital market with issue the revenue bonds if you want. And accelerate project delivery because you can use special assessment revenue to get the project off the ground sooner.
This is steps in establishing a special assessment district. A successful special assessment district depends on obtaining support from the property owners within the area. It requires significant communication and outreach. This slide provides you with the steps necessary in establishing a special assessment district. I will not go into detail.
This is the example of the special assessment initiated by the government in this case the city of Dayton, Ohio. The assessment is for six years to cover and $18 million replacing the streetlight system it applies to all property owners, residential, commercial, and industrial properties in the city of Dayton, Ohio.
The second example is the sales tax district. This is a case where the district was formed to build 52 miles of additional lanes on US 36. The project cross over the four counties in Missouri. The voters approved a half cent sales tax for the duration of the 15 years. The project was finished in 2010 and the vote was repealed in August 2017 after the debt obligation was paid off. The independent auditor was brought in to do the audit to make sure that all of their obligations have been met and return the surplus to the four counties. I believe it was between 800,000 and 900,000.
Next we talked about community improvement districts. And community improvement district has quite a few names. They have a different name in different cities depending on the needs of the community they are serving and the city wants to call it. It might have a different goals and focuses but the process of creating the district is the same and the requirements are the same. The community improvement district is just another name for the business improvement district. You will hear from Natalie Avery the executive director of DC business improving district council so therefore I will be very brief. I want to point out a couple of important points.
The community improving district's geographic defined district in which commercial property owners vote to impose a special assessment on themselves. To create the community improvement District a simple majority of the affected commercial property owners and they can undertake many types of the projects. For example, Street and road construction and maintenance and as well as undertaking the public transportation studies. The parking facilities or recreation area, storm water and sewer systems, and any other services that the community improving district will focus on.
The funds collected by the tax Commissioner and then dispersed back to the community improving district that is managed by the Board of Directors and the Board of Directors are elected by the property owners within the district. It is not a political subdivision of the state, county, or municipality and has no taxing authority. Only the property in the community improving district will be affected.
I will skip all the rest of the slides and going directly to Federal influences on special assessment. The Federal's influence in special assessment or value capture in general is very limited. Only when you use special assessment revenue or value capture revenues as the matching share than the Federal and the state will have a direct influence. It does mean that you must follow the federal requirement but US D.O.T. support for the value capture. One of the criteria for build grants is nonfederal revenue for transportation infrastructure investment.
Federal Highway assemble the value capture implementation team. This slide provides the list of team members with expertise that are available to assist on the on-call services. The team focus on Communication and outreach. We bring you awareness of the value capture and its applicable to highway projects such as webinar series and provide on-call support. Technical assistance, we establish a peer program. We partner with the leading city and county and state who has successfully implemented value capture to provide technical assistance, peer training, and peer exchange. We also have an expert consultant that can be available to provide direct technical assistance as well. In terms of the clearinghouse we are using the web platform where we house all of the information such as lessons learned, project examples, as well as all of the publications. It is evolving. We will continue to update as it becomes available. You can help us on this area if your city or county or state that implements value capture in any technique. We would love for you to share with us. We will showcase them and make them available for others to learn from.
This slide just provides you the link to resources on the website. There are two funding sources that I want you to be aware of. The first one is a stic grant. Let's just say that the city wants to implement the special assessment. The special assessment would require the analysis of the property owner that benefits from the projects. Most of the small cities or small counties would not have the resources. This is a good candidate for applying for this grant. The second grant is the aid demonstration. That is up to $1 million per year. Let's say the city has a project and wants to implement a special assessment that have not been done by the city before. It would be a good opportunity to apply for the grant. All of the contact information as well as the application and process is available on the website and the link provided on the slide. I think that is the conclusion of my presentation and thank you for listening. I will now turn it over to Cara.
At this point we are ready to take any questions from the audience. You can ask your questions by typing them in the jackpot or dialing them over the phone. If there is any questions on the line we can take them now
To ask a question that is star one. A voice prompt on your phone line will indicate when your line is open. There are no questions at this time.
Thank you. It looks like somebody is typing in the chat box so maybe we can wait one minute for that to come in.
It looks like that person may be will ask later on. We can catch that question at the next question-and-answer session. So now we can turn it over to Noelle Dominguez who is the coordination section chief at the Fairfax County Department of Transportation. She will begin her section of the discussion.
Hello everyone. This is Noelle Dominguez. I'm the coordination section chief with Fairfax County Department of Transportation. Fairfax County is in the Washington, D.C. Metropolitan region. We are quite a large jurisdiction. 1.10 1.2 million people. About 400 square miles. The County begins about 10 miles outside of the Washington, D.C. Proper. I will just go through these slides and I will take questions at the end. Thank you for your time. First off just a little bit about Virginia route 28. It runs through several jurisdictions in northern Virginia and a major thoroughfare in our region. It connects people through various activity centers in northern Virginia. It goes through four or five individual localities. It is also one of the gateways to Dulles international Airport which is one of the largest airports in the nation. Business owners along route 28 in Fairfax and Loudoun counties have recognized the need for infrastructure. I want to note that the tax district is a joint effort between Fairfax County and Loudoun County which is our neighbor to the west. In Virginia we are what one calls a [Indiscernible] state so we do not have a lot of options unless granted the authority to do so by the Virginia General assembly. In Virginia the code does allow for the creation of independent taxing districts to support financing of transportation infrastructure and improvements. These districts can be formed only upon the joint petition of owners of at least 51% of the land area in the County is located within the boundaries of the districts which have been zoned or used for commercial or industrial purposes. That is the area that we have used in this specific transportation improvement district. So our district has been around for quite a while. In fact in 1987 is when the Board of Supervisors for both counties created the route 28 highway transportation and permit district which was to and fun improvements of the roadway including widening of the 10 grade separated interchanges along the roadway. It is about 15 miles of the length of the roadway within the tax district. The road itself does extend further South. Further South in Fairfax County as well as in our neighboring jurisdictions so it is only included in the tax district. Here is a brief map that you can kind of see it further to the east would be Washington, D.C. The grave it right to the middle is not. Green is the tax district and the gray area right in the middle is Dulles international Airport and that is not taxed as part of the business community. They are specifically receiving the assessment. So as far as the government the district commission itself is comprised of nine members. We have four members from each of our respective Board of Supervisors. We have the Commonwealth of Virginia Secretary of transportation or the designee. In addition to the actual commission we have an advisory board. This is comprised of 12 landowners in the district. Six of those are elected by the actual areas and landowners and they serve four-year terms we are coming up on an election in the upcoming months and we will be selecting the new commissioners for that purpose. Six members, free from each of our two counties are selected by the Board of Supervisors and they also fill the four-year term. Bought the advisory board and commission me annually that they have had additional meetings that they call if necessary.
These are just some of the products that we have gotten completed through the tax district here. They are all along the corridor. Those are not listed here so they have not been completed. I want to mention a bit about the tax district revenue history. Right now about one penny provides $1.3 million in revenue for FY 2020. The current assessment is $.18 per $100 value of assessed property. You can tell the amount that we had in the district does go up and down with the economy. There was a slowdown as we were all aware in 2008 and 2009 and you can see that drop was typical for the time affected on the assessed value but we did see a drop between 2009 and 2010 that has gone up again recently. This is split by both. You can see the assessments for both. Additionally there are some requirements as far as the implementation of the district. It is required to contribute 75% of the funding for all projects in the district. The state does cover the remaining 25%. The district has worked with the counties to issue bonds to support the projects. They use the incoming funds as the debt service. The state funds and revenue funds are used to cover the debt service placements. We do have other partners. Some that I do specifically want to mention. Here in Virginia in 2013 there was legislation provided that allows the collection and the distribution of funds at the regional level for specific regions in Virginia. In northern Virginia we have what is called the Northern Virginia Transportation Authority. That specifically has the authority to currently allocate -- it receives about $250 million a year and allocates 70% of those two regionally significant projects. It does that based on the application basis criteria is given and decisions are made where the funding is distributed to. The remaining 30% is provided back to the individual localities that are comprised within the jurisdictions. That is sent by the governing bodies on eligible transportation projects. The counties that have this as an option to help fund some of these projects and in fact I believe that two of the counties. Fairfax and Loudoun together have submitted applications for five separate applications over the past five or six years to fund the construction of segments included in the tax district four of them have been approved. Three of those projects have been funded and are under construction or have recently been completed. The most recent has been approved for funding but it will take a couple of more years to be completed. The tax district asks that the revenue source is available. The county has applied on the tax districts that we have in they were successful in receiving the funding. So that is along with the revenue that the district continues to accumulate has allowed for the completion of the final identified projects. I want to briefly talk about the advantages and lessons learned from the Fairfax County perspective. The tax district or transportation proven district can be advantageous for large-scale high-cost projects. The tax districts are however vulnerable to larger economic trends. This specific district has accelerated the pace of improvements in the corridor. I also want to say that the advisory committee helps guarantee stakeholder buy-in for the life of the project. The business community is supportive of the tax district that goes along the corridor and you can see the visible results on the roadway. Additionally we can find it as necessary to seek input from the advisory committee. Additionally we have the annual permission meetings that allow it to the any recommendations based on the localities that have to also go back and approve some sort of action themselves. However, in addition to the advisory committee we do have professional staff at both the locality and the state level that is managing bonds and they manage the financial strategy that oversees the construction of the project. Those are vital to the success of the overall project. This was a summary of the route 28 tax district. If anybody has any questions I am happy to answer them.
Thank you. Operator, we are open to questions asked over the phone and also if anybody has questions that they would like to type in the chat we will take them that way as well.
Once again as a reminder it is star one if you would like to ask the question.
What are the social ramifications of this type of generation as it pertains to lower income communities. So if the presenters have dealt with low-income communities and the capacity however he handled it.
This is Natalie. I have not done my presentation yet but I can still build a response to that into my presentation when I do it.
Okay great. Thank you.
This is no well. I was going to say our corridor is fairly commercial and industrial. We are right near the Dulles international Airport. We don't have a lot of residences there. So I'm sorry I don't have much of an answer to that one as well.
It looks like we are getting one more question. You can ask questions over the phone or dial them into the chat pod so Robert asks what is the relationship between decision to fund the project and the planning and decision-making to select a project.
This is one of the colleagues of the innovation. So if this is an entirely local project then it would not apply. If we were using these funds to fund the federally assisted project the umbrella applies to all projects that would be funded under that. So I think that answers the question. If there is a more nuanced aspect maybe you can clarify.
Okay thank you. Looks like there's no other questions at this time so we can turn it over to Natalie Avery the executive director of the DC business improvement District Council.
Thank you. So I am going to focus on the nuts and bolts of how business improvement districts work in Washington, D.C. I am the director of the Council which is the Association of the city's 11 business improvement districts. So what is a business improvement districts? It is organized and established by property and business owners to enhance the economic and commercial vitality of a specific geographic area. It provides amenities and services that make the neighborhood a more attractive place to work and visit and live and invest in. It looks like the formatting got a little bit messed up on the presentation. Sorry about that. The one that you get will not be messed up. So I will give a little bit of background about how the model started. It actually started in Canada in about 50 years ago. That was in 1970. A group of business owners from the lower lip West Village neighborhood wanted to find new ways to compete with the suburban shopping malls these were urban district business owners that noted that the malls kind of enjoyed an array of services to maintain and market the mall is a clean and safe and dynamic place to visit and locate a business. These business owners along the urban commercial corridor in Toronto were basically on their own to manage and market their district. They had to rely on spotty municipal services and voluntary efforts to compete as a shopping and dining destination. So the business leaders worked with the government partners and decided to explore a new structure that would enable commercial property owners to pool their resources and use services that were focused on the district as a whole. They were looking for programs with an intensely local focus that went he owned traditional municipal services and they knew that they required a funding source that was more sustainable than traditional merchant associations could offer. The model of the business improvement District using a special assessment funding mechanism emerged from this effort. So basically how it works is the property owners had geography pay the special assessment by the taxing authority and used to fund projects which are specifically tailored to improving in which they operate. The model enables them to bring businesses to bear in the neighborhood and carry out programs and improve the business environment. It is very targeted and intersectional ways. It's important to note that these services are supplemental and should not replace the services provided by the government. The other thing that is really important about this model is it creates the context to bring together diverse stakeholders in a place to define priorities that can make and implement plans collaboratively. So it is different from the traditional merchant Association model because they are financed by the special assessment which enables them to avoid the free rider problem. It also differs from the national Main Street model which a lot of cities use to support commercial areas because unlike the main Street models it does not have to rely on government fundings and the specifics of citywide budget processes. Today there is about 4000 of these organizations globally. Thay was saying that there is a lot of different names and there actually are a lot of differences in various jurisdictions over the way that they are managed and overseen by government authorities. So I will talk a little bit about what makes a business improvement District. It is the ability to focus on the local ecosystems that make places work. It is very important that they are owner initiated and centered. The ones that are the most successful are the ones that are driven not by the government but by property owners within the district. The governments by a Board of Directors is usually property owners on those boards in the district you have to have at least a majority. You can also include other stakeholders from cultural institutions or churches or tenants or other stakeholders that can contribute to defining priorities and helping to guide the organization. In the district there is very limited government oversight. The government our partners but you go through the renewal process every five years and that is sort of the extent of the oversight. There's requirements within the legislation that you have to be audited and you have to basically follow the plan that you set out every five years. That is sort of the extent of the government oversight. I can talk about that later. The advantages of the funding mechanism. The free rider problem with that is a lot of times in areas that are cases where businesses and property owners will get together and form an association to try to bring services and plan events and do joint marketing and the business Association model tends to be voluntary. You pay dues and a lot of those organizations then end up having a minority of the business and property owners paying the dues and the entire area gets the benefit of the services so it is just not a sustainable way of keeping and sustaining the level of services that really have the impact. Like I was saying in the beginning with the municipal budget in this is a very sustainable funding source because it is especially as property values are going up which is one of the things that you hope that they would go up because you are improving and providing services to improve the area so it is a sustainable funding source. These are the things that are really important. You have ward members that are overseeing how the money is spent and how priorities are set that really have to get in the game. They are paying into the bid. It also creates a framework for collaboration. Because it is so sustainable funding source you really can have staff and programs that can last over a long period of time where you can really build a. You can go from implementation to evaluation ship planning and implementation again with the same staff people. That is a really important aspect of why it works so well especially in the district. The other advantage is that there are pilot ideas that can be scaled to meet primary municipal needs. For instance in the district the downtown DC. Modeled the first bike share program which was scaled throughout the rest of the city. Other things that they have done is modeled and Uber and lift pickup zone in one of their areas so that program you can learn lessons and then implement it in other parts of the city where it was needed. One of the most important things is how because they work so closely with the government partners but they are ultimately accountable to and working with stakeholders from the private sector is that they are really able to have a foot in both worlds to create and build bridges between the two sectors. This is a map of the district BID. This is where about 38% of the entire tax basis generated within these areas. That's important things about how and why they work as they rely on having enough of a cap space to be able to fund programs that can have an impact. So in 2018 alone the district has been collectively invested over $34 million to enhance and maintain their districts. So they place management and they do place making and placed the branding.'s a place management that is litter removal and sidewalk gutter sweeping entry box maintenance. That is the bread and butter of what they do and what they started out doing was focusing on where there just were not enough municipal services to create the kind of environment that the business leaders wanted to be able to really have the district live up to its potential. And it remains important even as the city has improved its ability to provide because it is such a visible way of the BIDs showing what they do in the public space and having an impact every day. So that is important. Also creating a more dynamic and vibrant public realm. In addition to managing it is really paying attention to how the area feels. How interesting it is and trying to create and then people are familiar with downtown Washington of the 80s and 90s up before. There was just a lot of concrete. There was a lot of just plainness. A lot of what this has done is using landscaping and public art and other things to just make a better experience using the public realm. Most of these projects, even the ones that you see here in the little pictures were done with partnership of the government. There's one that is a circle with a sculpture. That was a partnership in the Golden triangle area which is the city's central business district. It was a partnership with a local department of environmental energy. They have installed some rain gardens along one of the main thoroughfares. Not only is it beautiful but it also has a rainwater capture function. And placed branding. In terms of just developing a sense of identity for a place in helping to work with the businesses in the property owners and visitors and residents to get a sense of how and why people are attracted to a place and what its history is and building on that to be able to build a communication strategy that drives more visitors to the businesses in the area and attracts more residents and tracks investment. Economic development planning really is being able to have this ground-level view of the dynamics to help inform the city planning department and economic development authority and to just be partners in terms of thinking about the big picture economic development efforts. A lot of what they also do and this in terms of the question now about low income communities. One of the things that is really important to the BID is having their workforce programs integrated into the street cleaning and maintenance work that they do. Most of them hire workers and have programs for workers so that they not only get a good job with benefits and a living wage but they also get wraparound services to help them with other issues that they are facing. And then another big thing that they have done from the very beginning is really focus on tackling homelessness as a partner with the city and with providers. The picture that you see here is downtown services Center in downtown DC which is run by the downtown bid and partnership for the city and it is basically a one-stop shop and a respite center for people experiencing homelessness. It is not a shelter. It is only open during the day but it has a whole array of services from the city. Everything from getting connected to Medicaid to health services to being able to take a shower to being able to do their laundry. Parks and public realm is a really important piece of what they do. Not only in terms of maintaining but helping to bring people together to help with design and programming. I already talked a little bit about economic development.
I just want to kind of address the questions that came off. I think they were more or less answered. We are back in the room. I will turn it back over to the presenter. It keeps putting us out.
I just got booted out again. >> We did have a question. We got some really good questions about equity
So what I was going to say about that if your bid or your assessment district is taking a comprehensive view and one of the goals is economic development you are not going to do that in isolation from other agencies. You are going to be working with the city planners and economic developers. If you are looking to make improvements beyond transportation with a special assessment district or even if it involves transportation as a bigger part of the package clearly land-use might come into that. There's opportunities to use some funds to mitigate any economic impact. One of the goals in terms of value capture that we emphasized is the sustainable land-use. If the land is priced properly we will have transportation and access and mobility increasing the value of land. It will call for higher rent. If one of your goals is economic development this will be the end result. Public involvement should bring them but there are opportunities to mitigate in terms of the positive economic benefits I think the free rider concept was explained but it is something from economics as well for the community or society benefits and somebody is taking advantage of those benefits without contributing by paying for them. One of the common things is in Econ 101 where they talk about free riders. It's the immunization where everybody gets immunized in your community against the disease and you don't while the entire community will be safe from whatever disease and you will as well because nobody else will be carrying it. So you would be a free rider on that system. The free rider problem is one in which basically people are willing to take advantage of benefits without contributing.
We keep going in and out but we had one more question. What happens as businesses leave corridors and vacancy rates increase. How do you maintain the revenue stream. Maybe
I think Natalie can answer that question.
That is one of the reasons why the mechanism is linked to the property owner. If they lose tenants it is based on their property. Most of the bids in the district are either funded. The assessment formula is based on assessed value of the property or square footage of the property. So one of the main priorities within the business improvement District is to help reduce vacancies by creating a nicer and better and more well-managed public environment but also in some cases doing some direct marketing and business retention and attraction. That is usually in partnership with the studies for economic development and economic partnerships. So that is a really important piece of what they do is help to track and be partners in reducing vacancy.
I cannot seem to get back in. Should we just do questions
Hello. I think maybe that would be the best approach or if you want to talk through if you have a hard copy of your presentation on your desktop.
I only had a few more things that I was going to talk about and then I will be done. In terms of the value proposition that is the most important thing for a BID to be able to be renewed is to have the property owners believe that it is still providing value. And then it is also a very high bar to get property owners to agree to even start a BID. You have to get over 50% but I say that it is important to get even a higher percentage than 50% of owners to agree to format because you want that level of support to make it work. It is difficult to convey the value proposition because he cannot really run an experiment. You can't say this is what downtown would have been like without it. You can't do that for obvious reasons so I think how you measure the value proposition and whether the property owners to pay the assessment agree to form or renew them because they see the value in the services. The benefits for the businesses or the benefit from the collective marketing in the area is a clear and more well-managed public environment and amenities are created by the public programming and the assistance revolving the public space and other playspace issues to the local government is the ability to be able to partner with them to pilot innovation. They can get really invaluable insights about the local ecosystems that will help them inform policy decisions and this is benefiting from a growing tax base that they contribute to expanding. I think this goes back to something that I wanted to mention about the equity because that is a huge conversation not only in DC but with this industry across the country. I think that when they first started a lot of the argument in terms of equity was that if you are able to make sure that your downtown was economically vibrant as possible you could interact investment and interact jobs. When they first started basically the city was bankrupt. The general fund tax revenues have since then grown from $2.5 billion in 1996 to $7.8 billion today. The cumulative fund balance has grown from $-51 billion to a $2.8 billion surplus. I'm not saying that has to do only with the bid. There's a whole lot of other factors that sort of made the shift but I think that the argument that you are helping to fund the city's social agenda by creating the economic engine to heal the tax base is one of the arguments. That in the context of today when we are seeing so much growth and inequity between spatially and racially in our city is it is not really enough to say that we are just going the taxpayers so I think that more bids across the country and in the city are trying to be more intentional about how they integrate. With concerns around sharing the prosperity more widely and it is through workforce development programs but also through other kinds of partnerships with other parts of the city especially other parts of the city that don't really have the tax base to support a BID but could benefit from the kind of structure and expertise that they provide around improving places. So that is something that I wanted to say. And then when you get the presentation I included some links to some research about efforts to nail down the benefits of this improvement districts. There's not that much quantitative research out there. It is mostly qualitative. It is mostly testimonials and businesses. Residency in a value in having these kinds of services in their areas and supporting them and they get renewed. So that is the end of my presentation.
Thank you. I just want to apologize for the problems with the web room and with the formatting. I am not sure what is going on but apologies to everyone and thank you for sticking with us. If anyone has any questions we can take them over the phone or you can type them in.
As a reminder for those on the phone please press star one.
I think the people might have to ask the question through the phone because the system is kicking people off all the time.
So we can transition to just a couple knowledge assessment poles that are on the screen now. If you could take a minute and fill those out that would be great.
This is Noelle. I think that there is a question asking about how the project got constructed. I saw something in the chat. They asked to is responsible for planning and permitting and whatnot. And as far as the County projects they are administered by the Virginia Department of Transportation. They work in coordination with our planners and engineers here the Commonwealth itself administers those projects because at least in counties in Virginia the state does own and maintain most of the runways.
It looks like everybody who was going to answer the poll questions has answered so we can move on to the list of reminders for the next upcoming webinars. There are four more after today. You can click on these registration links to register. There will be one per month for the next four months. Here again are just a couple of closing poles asking you what you thought of today's webinar and how we can do more to be helpful to you in the future. If you could take a moment to fill those out that would be helpful.
So now we can turn it over to the last set of questions. These are nine evaluation questions. They are all going to be up on the screen. They are a little cramped but we can leave you to please fill them out as we wrap up the webinar. I will turn it over to Thay if you have any concluding remarks before we finish.
I just want to thank Natalie and Noelle for sharing their valuable time with us the experience on route 28 and the DC business district were informative. This is very enlightening for everything that we learned today. Thank you and I also want to thank the participants for their patients and we apologize for the technology issues. Thank you.
Thank you. Operator we can now wrap up the webinar.
Thank you that concludes today's webinar and thank you for your participation. [event concluded]